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John W. Mitchell, Senior Correspondent | May 17, 2019
From the May 2019 issue of HealthCare Business News magazine
HealthCare Business News spoke with Michael Darling, RN, VP Supply Chain, St. Luke’s Health System about his long tenure in supply chain management. Darling, who came to the field 25 ago years from the nursing side of operations, brought an especially timely perspective to the sector as the switch from fee-for-service to value-based emerged.
HCB News: How long have you been involved in hospital supply chain and how was the process different when you first started?
Michael Darling: I'm a nurse by trade. I got into healthcare in the late 70s and spent my first 15 years on the clinical side, primarily in the ICU and the operating room. Then I made the move to supply chain because of the rapid growth of HMOs, PHOs and MSOs.
So I've been in the supply chain side for the past 25 years. Three decades ago, supply chain was pretty much placing the order, making sure the inventory got moved, and if you had a warehouse, managing that. There was minimal interface with the end users of the product and almost none with the finance team.
There are some distinct differences today compared to three decades ago. For one thing, you need to integrate the supply chain clinically. With that comes the rapid expansion of what we call clinical quality value analysis or CQVA.
Three decades ago the best thing we could get was — if the sub-accounts were set up right — that you could follow where the expenses were on the monthly financials. Today we’re following cost by procedure, by physicians, by locations, and looking at the utilization difference and variations in practice. One of the things that we found is that we’re able to look at opportunity across the continuum of care.
If you’re evaluating the best quality outcomes and cost for the right products to improve patient throughput, sustainability is the key — and this is especially true when we’re looking at how the clinical pathways are set in the EMR. Sustainability and commitment in the marketplace drive total landed cost per procedure.
With the data we have today, we have physicians coming to my team asking for a review of their specialty area. You have to make it easy for your clinicians to participate. The data needs to be trustworthy to help physicians make decisions, and provide key performance indicators.
HCB News: Has hospital consolidation made supply chain simpler or more complicated?
MD: It’s more complicated. Instead of having one hospital and one opinion we have multiple opinions, because each facility is serving a community with its own unique needs. But it’s also an opportunity to bring those groups together to talk about what they’re doing, versus what someone else is doing, to identify best practices.
John Masini
Single Vendor Contract
May 20, 2019 09:28
Very interesting and insightful read. As hospitals consolidate and health systems grow, I understand how administratively a decision may be made to create consistency with 1 vendor on products. Idea being - higher volume of orders with 1 vendor to leverage lower cost per unit...... But the issue this creates is that new technologies are blocked from evaluation. Health systems go into multi-year agreements with 1 vendor, but finding this agreement is reached without bringing competition into the mix. Not evaluating other's prices or clinical capabilities and not knowing if there is a better option out there. I've never understood why any department would want to eliminate competition altogether - in the end, competition is ALWAYS BEST FOR THE CUSTOMER.... And I do believe St. Luke's is exclusive with some capital equipment companies.
Not to challenge, but I've always been interested in understanding the other side's rationale. How do you know that what you order is best for patients and department if you only look at 1 option every time you buy?
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